Correlation Between STMicroelectronics and Hospital Mater
Can any of the company-specific risk be diversified away by investing in both STMicroelectronics and Hospital Mater at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining STMicroelectronics and Hospital Mater into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMicroelectronics NV and Hospital Mater Dei, you can compare the effects of market volatilities on STMicroelectronics and Hospital Mater and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in STMicroelectronics with a short position of Hospital Mater. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and Hospital Mater.
Diversification Opportunities for STMicroelectronics and Hospital Mater
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between STMicroelectronics and Hospital is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV and Hospital Mater Dei in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hospital Mater Dei and STMicroelectronics is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on STMicroelectronics NV are associated (or correlated) with Hospital Mater. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hospital Mater Dei has no effect on the direction of STMicroelectronics i.e., STMicroelectronics and Hospital Mater go up and down completely randomly.
Pair Corralation between STMicroelectronics and Hospital Mater
Assuming the 90 days trading horizon STMicroelectronics NV is expected to under-perform the Hospital Mater. In addition to that, STMicroelectronics is 1.11 times more volatile than Hospital Mater Dei. It trades about -0.19 of its total potential returns per unit of risk. Hospital Mater Dei is currently generating about 0.11 per unit of volatility. If you would invest 380.00 in Hospital Mater Dei on November 5, 2024 and sell it today you would earn a total of 24.00 from holding Hospital Mater Dei or generate 6.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STMicroelectronics NV vs. Hospital Mater Dei
Performance |
| Timeline |
| STMicroelectronics |
| Hospital Mater Dei |
STMicroelectronics and Hospital Mater Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and Hospital Mater
The main advantage of trading using opposite STMicroelectronics and Hospital Mater positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics position performs unexpectedly, Hospital Mater can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Hospital Mater will offset losses from the drop in Hospital Mater's long position.| STMicroelectronics vs. Taiwan Semiconductor Manufacturing | STMicroelectronics vs. NVIDIA | STMicroelectronics vs. Broadcom | STMicroelectronics vs. Texas Instruments Incorporated |
| Hospital Mater vs. Check Point Software | Hospital Mater vs. Align Technology | Hospital Mater vs. Hormel Foods | Hospital Mater vs. Air Products and |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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